Australian government principles for Social Impact Investing

Social impact investing Australia

In response to the government’s discussion paper on Social Impact Investing (SII), released in January 2017, the Turnbull Government announced in the 2017-18 Budget context a number of initiatives to encourage the continued development of the SII market in Australia.

The government’s response includes funding of $30 million over ten years, the release of this set of principles to guide the Australian government’s involvement in the SII market, and notes that the government will continue to separately consider ways to reduce regulatory barriers inhibiting the growth of the SII market.

Social Impact Investing is an emerging, outcomes‑based approach that brings together governments, service providers, investors and communities to tackle a range of policy (social and environmental) issues. It provides governments with an alternative and innovative mechanism to address social and environmental issues while also leveraging government and private sector capital, building a stronger culture of robust evaluation and evidenced-based decision making, and creating a heightened focus on outcomes.

It is important to note that social impact investing is not suitable for funding every type of Australian government outcome. Rather, it provides an alternative opportunity to address problems where existing policy interventions and service delivery are not achieving the desired outcomes. Determining whether these opportunities exist is a key step in deciding whether social impact investing might be suitable for delivering better outcomes for the government and community. Government agencies involved in social impact investments should also ensure they have the capability (eg, contract and relationship management skills, and access to data and analytic capability) to manage that investment.

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